15 million taxpayers could owe the government
It turns out that more than 15 million taxpayers may owe the government $250 or more because of how the IRS last spring set up President Barack Obama’s tax break that was designed to help consumers spend the U.S. economy out of recession. Single taxpayers that have more than one job, married couples where both spouses work, might need to repay the government around $400. Social Security recipients who also earn taxable wages may have to repay $250. The tax credit, which is supposed to pay individuals up to $400 and couples up to $800, was Obama’s signature tax break in the massive stimulus package enacted in February. Most workers started receiving the credit through small increases in their paychecks in April. The withholding tables, however, do not take into account several common categories of taxpayers. And that could force some people to repay what the government gave them. If you had two jobs you received a $400 boost in pay at each job, for a total of $800. Since you are only eligible for a maximum credit of $400, the remaining $400 will have to be paid back at tax time. A married couple is eligible for an $800 credit. If both spouses make more than $13,000, the new withholding tables give them each a $600 a total of $1,200. There were 33 million married couples in 2008 in which both spouses worked. The bottom line is more than 10 percent of all taxpayers who file individual tax returns for 2009 could owe additional taxes. This is another example of something an inexperienced President did so he could claim his campaign promise was meet, a tax cut for 95% or working families. It looks as though just like all the other smoke and mirrors this Houdini trick master was only playing three card Monty with payroll deductions.